Microsoft's SkyDrive cloud storage infringes on trademarks of the British Sky Broadcasting Group, a British court ruled on Friday

Microsoft on Monday said it will appeal a trademark lawsuit over its SkyDrive cloud storage service it lost to the British Sky Broadcasting (BSkyB) Group.

BSkyB sued Microsoft in order to prevent Microsoft from using "SkyDrive" as the name for its cloud storage service throughout the European Union, according to the ruling of the England and Wales High Court that was handed down on Friday following an eight day trial in April.

According to BSkyB, Microsoft infringed on two registered Community trade marks (CTMs) and two UK registered trade marks (UKTMs).

The court ruled that Microsoft's use of the SkyDrive name is likely to cause confusion among consumers and therefore infringes on the Sky trademark. The judge referred to the ease of confusion between SkyDrive's cloud services and Sky's broadband services. The court also determined that the name was possibly detrimental to the Sky brand, so it could be viewed as trademark infringement on this ground too.

"The judge decided that BSkyB's U.K. and Community Trade Mark's were infringed," Robert Graham, a Senior Associate for Pinsent Masons LLP who specializes in IT and telecoms disputes, said in an email. Graham was not involved in the case.

Since the High Court of England and Wales is a Community Trade Mark court, the court is allowed by the Court of Justice of the European Union (CJEU) to apply decisions across the E.U. and not just in the country in which the decision was made, he said.

A Sky spokesman welcomed the court's decision and said that it regards any unauthorized use of the Sky name as a clear infringement of its Sky brand. "We remain vigilant in protecting the Sky brand and will continue to take appropriate action against those companies that seek to use our trademarks without consent," the spokesman said in an emailed statement.

"There's a follow up hearing on remedies. That will decide what the implications are for Microsoft, including our future restrictions around the use of the Sky brand," he added.

Microsoft intends to appeal the case, a Microsoft spokeswoman said in an emailed statement on Monday, adding that decision is just one step in the legal process. "This case is only about the SkyDrive name and has nothing to do with service availability or future innovation," she said.

"As Microsoft intends to appeal the decision it is unlikely to stop using the SkyDrive name until the appeal takes place," said Graham.

"If Microsoft's appeal is unsuccessful, and the finding of infringement is upheld, then BSkyB may seek an account of profits/enquiry as to damages," he said, adding that Microsoft may also have to pay continuing damages for so long as it uses the SkyDrive name.

Microsoft could also choose change the name for its cloud storage service but it may prefer to pay damages and take a chance on the appeal, he said.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com